Domino Company uses the aging of accounts receivable method to estimate uncollec

Question

Domino Company uses the aging of accounts receivable method to estimate uncollectible accounts expense. Domino began Year 2 with balances in Accounts Receivable and Allowance for Doubtful Accounts of $43,430 and $3,380, respectively. During the year, the company wrote off $2,590 in uncollectible accounts. In preparation for the company's Year 2 estimate, Domino prepared the following aging schedule % Likely to be uncollectible 1% 5% 10% 25% 50% Number of days past due Receivables amount Current 0-30 31-60 61-90 Over 90 Total $68,006e 26,300 6,560 3,320 3,000 $107,186e What will Domino record as Uncollectible Accounts Expense for Year 2? Multiple Choice $4,191 $1,601 $4,981 $2,590

Explanation / Answer

Calculate uncollectible accounts expense ;

Allowance for doubtful balance after write off = 3380-2590 = 790

Uncollectible account expense = 4981-790 = 4191

so answer is a) $4191

Current 68000 1% 680 0-30 days 26300 5% 1315 31-60 days 6560 10% 656 61-90 days 3320 25% 830 Over 90 days 3000 50% 1500 Total 107180 4981

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